Morning journal and courier., 1887-12-07
The Presidents Message.
the Cougress of the united States:

70 the Congress of the United States
You are confronted at the threshold Of
| your legislative duties with condition of the
national finances which imperatively de-
mands immediate and careful consideration.
The amount of money annually exacted
through the operation of present laws from
the Industries and necessities of the people
largely exceeds the sum necessary to meet
the expenses of the government. When We
consider the theory of our institutions guar
antees to every citizen the full enjoyment of
all fruits of his industry and enterprise with
| only such deduction as may be his share
| toward the careful and economical mainten-
! ance of the government which protects him
it is plain that the exaction of more than this
is indefensible extortion and cu1pable be-
| trayal of American fairness and justice. This
| wrong inflicted upon those who have the bur-
| den of national taxation like other wrongs
| multiplies brood of evil consequences. The
| public treasury, which should only exist as
4 conduit conveying the peoples tribute to its
| legitimate object of expenditure, becomes a
| boarding place for money needlessly with
drawn from trade and the peoples use, thus
| crippling our national energies, suspending
| our countIy's development, preventing invest
| ment in productive enterprise, threatening f.
| nancial disturbance and inviting schemes of
public plunder.
| This condition of our treasury is not alto
gether new, and it has more than once of late
| in Congress, who alone can apply a remedy,
and yet the situation still continues with ag-
| gravated incidents more than ever presaging
| financial convulsion and widespread disaster.
| 1t will not do to neglect this situation be-
| cause its dangers are not now palpably immi-
| nent and apparent; they exist none the less
| certainly and await the unforeseen and une1-
| pected occasion when suddenly they will be
| precipitated upon US. On the Seth day OF
June, 1885, the excess of revenues over pub
lie expenditures after complying with the an
| nual requirement of the sinking fund act was
| ST, ,S59, ,735. 04; during the year ended June
| 30, 1886, such excess amounted to $49, ,405,-
| $500; during the year ended June 80, 1887,
| it reached the sum OF 500, 567 ,S4S. 54.
The annual contributions to the sinking
| fund during the years above specified
amounted in the aggregate to $138, ,068, $780,
Cd, and deducted from the surplus as STATED
were made by calling in for that purpose
| outstanding per cent. bonds of the govern
/ ment. During the six months prior to June
80, 1887, the surplus revenue had grown SO
large by repeated accumulations and it was
feared that the withdrawal of this great sum
Of money needed by the people would SO af-
i feet the business of the country that the sum
| of $40, 1854, 100 of such surplus was applied
/ to the payment of the principal and interest
i of the per cent. bonds still outstanding and
| which. were then payable at the option of the
government.
/ The precarious condition of financial af-
| fairs among the people still needing relief
| Immediately after the 30th day of June, 1887,
1 the remainder of the per cent bonds then
| outstanding, amounting with principal and in
terest to the sum of SIS, ,977, 500, were called
| in and applied to the sinking fund contribu-
| ton for the current fiscal year, notwiths
| standing the operations of the Treasury de-
| partment.
! Representations of distress in business cir
| cles not only continued, but increased, and
1 o1r14a al thaSA
| circumstances the contributions to the sink
/ ing fund for the current fiscal year was at
| once completed by the expenditure of S27,-
| 6S4, 1885 in the purchase of government
bonds not yet due, bearing and ~ per
cent interest, the premium paid thereon aY-
| eraging "a per cent. for the former and per
cent for the latter. IN addition to this
the interest accruing during the current year
upon the outstanding bonded Indebtedness
| of the government was to some extent out
weighed and banks selected as repositories
of public money were permitted to somewhat
increase their deposits.
THE SURPLUS REVENUES.
While the expedisnts thus employed to re-
| lease to the people the money lying idle in
| the treasury served to avert Immediate dam
ger, our surplus revenues have continued to
| accumulate, the excess for the present year
amounting on the first day of December to
500, ,258, ,701. 10, and estimated to reach the
next, at which date it is expected that this
sum added to prior accumulations will swell
the surplus in the treasury to $140, ,O0U, O0U.
There seems to be no assurance that with
such withdrawal from use of the peoples
circulating medium our business community
may not in the near future be subjected to
the same distress which was quite lately pro-
duced from the same cause, and while the
functions of our national treasury should be
few and simple, and while its best condition
would be reached, 1 believe, by its entire
dsconnection with private business interest.
yet when by perversion OF its purposes 1t
idly holds money uselessly substracted from
the channels of trade, there seems to be rea-
son for the claim that some legitimate means
should be devised from the government to
restore in an emergency, without waste or e&~
travagance, such money to its place among
the people.
BUYING BONDS.
| IF such an emergency arises there now ex-
lists no clear end uudoubted executive power
of relief. Hereafter the redemption of per
cent. bonds, which were payable at the option
of the government, has afforded a means for
the disbursement of the excess of our reYe-
nues; but these bonds have all been retired
and there are no bonds outstanding the pay
| ment of which we have the right to insist
upon. The contribution to the sinking fund
which furnishes the occasion for expenditure
| in the purchase of bonds has been already
made for the current year SO that there is no
outlet in that direction.
In the present state OF legislation the only
pretense of any existing executive power to
restore at this time any part of our surplus
revenues to the people by its expenditure
consists in the supposition that the secretary
of the treasury may enter the market and
| purchase the bonds OF the government not
yet due at rate of premium to be agreed
upon. The only provision of law from which
such a power could De derived is found in an
appropriation bill passed number of years
ago, and it is subject to the suspicion that it
was intended as temporary and limited IN its
application, instead of comforting continu-
| ing discretion and authority. No condition
ought to exist which would justify the grant
of power to single official, upon his Judg-
ment of its necessity, to withhold from or
release to the business of the people in an
unusual manner money held in the treasury,
and thus affect at his will, the financial sit
uation of the country; and if it Is deemed
wise to lodge in the secretary Of the treasury
/ the authority in the present juncture to pur-
chase bonds, it should be plainly vested and
provided as far as possible with such checks
and Limitations as will define this officials
right and discretion and at the same time re-
| lieye him from undue responsibility.
In considering the question of purchasing
bonds as means restoring to circulation the
surplus money accommodating in the treasury,
| it should be borne in mind that premiums
must of course be paid upon such purchase;
| that there may be large part of these bonds
held as investments which cannot be pur-
chased at any price, and that combinations
among holders who are willing to sell may
| unreasonably enhance the cost of such bonds
to the government.
1t has been suggested that the present
| bonded debt might be refunded at less rate
of interest and the difference between the old
| and new security paid in cash, thus finding
| use for the surplus in the treasury.
The success of this plan, it is apparent,
must depend upon the volition of the holders
of the present bonds; and it is not entirely
certain that the inducement which must be
| offered them would result in more financial
| benefit to the government than the purchase
of bonds, while the latter proposition would
| reduce the principal of the debt by actual
payment instead of extending it. The prop-
| osition to deposit the money held by the gov
ernment in banks throughout the country